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Alert), but Made And, Importantly, Have an Impact on How No Recommendations VOLUME 34, NUMBER 32 ● NOVEMBER 21, 2008 CalChamber: How Public Policy Can Help Industry-Specific Restore State’s Fiscal Health Taxes Hurt Economy, Budget Solution With the 1) Create and seize economic develop- California ment opportunities. During the last Industry-specific tax increases will economy economic downturn, the Legislature elim- hamper the economic recovery necessary contracting and inated California’s Trade and Commerce to improve the state’s budget outlook, the the state budget Agency, which was responsible for California Chamber of Commerce told deficit increasing, the Governor and state legislators last the Governor has week. appropriately Commentary “Our state’s fiscal health will never called for swift By Allan Zaremberg improve without a strong economy,” and decisive CalChamber Vice President of action. Our Government Relations Marc Burgat policy leaders wrote in a letter sent November 13 to must carefully examine which program Governor Arnold Schwarzenegger, reductions and which revenue-raising Three-Point Plan to Stimulate Economy with copies to legislators. “As such, proposals hurt our economic recovery each budget proposal must be balanced and what new measures will stimulate between the need to maintain necessary productivity, employment and the Create and seize economic government programs and stimulate creation of wealth for all Californians. 1 development opportunities. economic growth.” The California Chamber of Commerce The CalChamber sent the letter in has recently commented on some of the Reduce the cost and risk of anticipation of the November 14 meeting proposed tax increases (see article at 2 keeping and growing jobs. of the Assembly Budget Committee. right), but our state’s fiscal health will The committee reviewed the Governor’s never improve without a strong economy. Jump-start public and proposal combining cuts, taxes and While the recession is global in 3 private infrastructure and economic stimulus measures to address reach, state public policy can make commercial projects. the state’s estimated $11.2 billion budget material improvements for California deficit (see November 7 Alert), but made and, importantly, have an impact on how no recommendations. swiftly and strongly we will recover from The letter continued as follows: this slowdown. economic development. We can no longer take economic development for granted. “We strongly support your early Three-Point Plan The Governor should establish a focused leadership in working to solve the budget crisis and your call for an economic As an initial contribution to raising this economic development effort, led by his office, including: stimulus package to be included in the issue, we suggest a three-point plan to budget solution. ● Assemble “Strike Forces” of key stimulate productivity, employment and See CalChamber: Page 3 the creation of wealth for all Californians. state, local, utility and private officials to streamline permits, identify financial incentives, and involve all decision makers on a project team. The focus Inside Your Ideas, Please! would be facilitation, not regulation, and What can be done to reduce the goal would be a successful project, ● Services Tax: Page 3 the cost of doing business in not reducing environmental standards. ● Pictorial Roster of Legislature: California? E-mail your ideas to Nobody can help solve a local air quality Special Insert [email protected]. issue like a regional air pollution regulator; See How: Page 4 NOVEMBER 21, 2008 ● PAGE 2 CALIFORNIA CHAMBER OF COMMERCE Labor Law Corner Employee on Protected Leave Not Necessarily Immune to Layoffs of absence has no greater rights than he/ law unless there is an internal policy to she would if actively working. that effect; therefore, job performance is Nevertheless, various scenarios come a valid consideration in deciding which to mind. For example, in the question employees might be let go. posed above, if the surveying department ● Any internal policies/handbook rules consists of 15 people, and one of those should be followed to avoid a breach of employees is on FMLA for baby bonding contract claim. time, there should not be an issue ● Layoff decisions should take into Dana Leisinger consideration whether individuals are Senior Helpline regarding laying off everyone in the Consultant department, including the individual on on a protected leave of absence, as FMLA. noted above, so as not to target those individuals. We’re an engineering firm facing great Multiple Layoffs difficulties due to the economy. We need ● If the layoff falls within the to lay off the employees in our surveying But different concerns might arise parameters of the Worker Adjustment and department, but one of them is on Family in a setting when there are cutbacks Retraining Notification Act (WARN), and Medical Leave Act (FMLA) leave to contemplated, and three people are those rules apply. bond with his new baby. Do we have to subject to layoff—yet two of those ● If the company has organized labor, hold his job open for him? individuals are on protected leaves of the terms of the collective bargaining unit The answer is not as easy as one might absence out of a workforce of 75 people. should govern. think. An employee on a protected leave In this situation, the targeting of two This is not an exhaustive list, and people on a protected leave might come any layoff should involve examination under scrutiny. A claim of retaliation of business needs combined with consultation with an employment law California Chamber Officers might result if the decision is not properly researched and backed by business attorney to guide through these difficult Edwin A. Guiles necessity. times. Chair Frederick R. Ruiz Keep in Mind The Labor Law Helpline is a service First Vice Chair to California Chamber of Commerce Many companies are facing layoffs, preferred and executive members. For expert Larree M. Renda and there are few rules that govern explanations of labor laws and Cal/OSHA Second Vice Chair employers, but the following concerns regulations, not legal counsel for specific S. Shariq Yosufzai should be kept in mind: situations, call (800) 348-2262 or submit your Third Vice Chair ● There is no “last hired/first fired” question at www.hrcalifornia.com. Russell Gould Immediate Past Chair Allan Zaremberg President and Chief Executive Officer CalChamber-Sponsored Seminars/Trade Shows Alert (ISSN 0882-0929) is published weekly For more information, visit www. (KOTRA). January 15, Seoul, Korea. during legislative session with exceptions by calchamber.com/events. (650) 571-8483. California Chamber of Commerce, 1215 K International Trade Labor Law Street, Suite 1400, Sacramento, CA 95814- 3918. Subscription price is $50 paid through NorCal World Trade Center Holiday On-Demand Web Seminar Library. membership dues. Periodicals Postage Paid at Mixer. Sacramento Metro Chamber CalChamber. Through December 31. Sacramento, CA. and the Northern California Call for details. (800) 331-8877. POSTMASTER: Send address changes to World Trade Center. December 2, Alert, 1215 K Street, Suite 1400, Sacramento, Sacramento. (916) 447-9827. CA 95814-3918. Publisher: Allan Zaremberg. SoCal Port Workshop. Waterfront CalChamber Calendar Executive Editor: Ann Amioka. Associate Editor: Blake Ellington. Art Director: Marcy Coalition. December 2–3, Long Business Services Committee: Wacker. Capitol Correspondent: Christine Beach. (202) 861-0825. December 4, San Francisco Haddon. Photographer: Aaron Lambert. CeBIT 2009-Breakfast Presentation. Education Committee: Permission granted to reprint articles if credit Hannover Fairs USA. December 3, December 4, San Francisco is given to the California Chamber of Com- Irvine. (562) 901-9191. Fundraising Committee: merce Alert, and reprint is mailed to Alert at CeBIT TeleHealth/eHealth Breakfast December 4, San Francisco address above. Briefing. Hannover Fairs USA. Board of Directors: E-mail: [email protected]. December 5, Millbrae. (415) 705-1765. December 4-5, San Francisco Home page: www.calchamber.com. Buy Korea 2009: Korean Product Annual Meeting: Showcase. Korea Business Center December 5, San Francisco CALIFORNIA CHAMBER OF COMMERCE NOVEMBER 21, 2008 ● PAGE 3 Analysis Services Tax May Need Voter OK to Yield Revenue for Local Governments Will local governments benefit from that levy the tax. So whether it is the that the “Legislature may not impose Governor Arnold Schwarzenegger’s state General Fund, the city of Dinuba or taxes for local purposes.” groundbreaking proposal to broaden the the Los Angeles County Transportation ● Second, local governments may sales tax base to include a limited set of Commission, all collect taxes from sales impose new taxes only under the services? of cars, clothes, restaurant meals and any authority of Proposition 218 (Article XIII Consumers today pay a sales tax other tangible good deemed taxable by C), which requires local voter approval ranging from 7.25 percent to 8.75 the Legislature or Board of Equalization. — two-thirds for special taxes and a percent, depending on where they make Then would not local governments majority vote for general taxes. the purchase. The General Fund portion receive a windfall of revenues if the Therefore, the only circumstance of this rate is 5 percent (the Governor Legislature broadened the sales tax base? under which local agencies would receive proposes raising this by another 1.5 Probably not. revenues from a broadening of the sales percentage points), with cities, counties It turns out the state Constitution
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